Shanghai, Sydney, Singapore, Taipei and Seoul aim to be the biotech hubs in Asia with government support, but the CEO of San Diego-based industry group Biocom Joe Panetta said more investors and companies should look hard at another contender: Kobe, Japan.

Famed for its marbled beef, mountain-framed harbor and antique cable cars, it is also home to the Kobe Biomedical Cluster--not to mention it is the first name of one of the National Basketball Association's all-time greats. But what Panetta notes is that it is one of several hubs in Japan where many of the ingredients exist for breakout biotech firms--much like what happened in Boston, San Francisco and San Diego all those years ago.

When combined with a top university research nationwide and a globally respected regulatory system--and a growing pathway to listing locally in Japan--there's a reason to focus on the city, Panetta said.

"We see a fairly good number of biotech companies popping up," Panetta said in a May phone interview with FiercePharmaAsia.

"They have research institutions, universities, a biotech association and a local government that is pretty aggressive about promoting biotech. They seem to be ahead of the curve than other areas like Osaka or Tokyo--places that are making an effort but are bureaucratic."

Or PeptiDream, which in May signed a collaboration with Merck ($MRK) to produce targeted peptides for treating a variety of diseases. The arrangement is the latest in the biopharmaceutical's long list of deals with multinational drug makers.

What also bodes well is the March Tokyo Stock Exchange listing of SanBio, a company which develops regenerative cell therapy and has undertaken U.S. clinical trials on chronic stroke patients who have not responded to conventional therapies, with its SB623 treatment showing positive results.

Deals with Big Pharma of course matter, Panetta said, but he really wants to see smaller firms from Japan and San Diego find each other through the industry body's Global Initiative.

"The idea is to grow as an industry liaison for our member companies, investors and government entities," Panetta said. "Obviously what is happening in Asia now is of great interest in that regard."

Japan is Asia's clear leader in patents, reflecting legacy big pharmaceutical activity as well as research by universities and institutions. However, money flows are dominated by a Tokyo Stock Exchange that places a focus on established firms, unlike the biotech boom in the U.S., which far outpaces venture capital funding sources in Asia.

Still, biopharma in Asia is moving beyond manufacturing, with active and growing clinical trials and R&D--and where the word "innovation" cannot be mentioned often enough. But biotech companies in Asia still struggle to raise money at home, and Panetta thinks the venture capital community in his neck of the woods can help there too.

Outside of Japan, firms like Brandon Capital Partners in April put down an A$200 million Medical Research Commercialisation Fund in Australia that seeks to take good ideas to the market that will bring in massive pension funds earlier in the game.

Some boutique venture funds focused on Taiwan and China are also making newer types of funding moves based in part on their ability to navigate the regulatory system.

But for Nippon, Biocom is joined in the effort with Japan Biocom Consulting that seeks to establish Biocom as the leading portal to Japan for California life sciences companies as well as to the U.S., for Japanese companies, investors and government entities.

"We think there are ways to work with Japanese companies to bring attractive terms," Panetta said.

To be sure, at least one recent high-profile deal for a San Diego-based firm, Ambrx, saw a heavyweight Chinese consortium of companies make a buy. But Panetta said the focus on Japan at first stems from the needs of smaller biotechs to deal with legal and regulatory certainty.

"From legal agreement enforcement to respect for intellectual property, Japan offers all of that compared to China where we just don't see IP protection now," Panetta said. "That appeals to venture funds and lawyers."